Barclays ups Microsoft price target on new Windows, Office

A Microsoft Office logo is shown on display at a Microsoft retail store in San Diego January 18, 2012. REUTERS/Mike Blake

(Reuters) - Microsoft will get a boost when it rolls out the next versions of its Windows operating system and Office suit, Barclays Capital said and raised its price target on the stock.

The world’s largest software maker will also benefit when PC shipments normalise later this year, as the shortage to hard disk drives lift, the brokerage said, and increased its price target on Microsoft’s stock to $33 -- a level last seen in February 2008 -- from $29.

“With the two new products Microsoft now has at least the potential to compete again properly in a world that is moving from PCs to tablets and smartphones,” Barclays wrote in a note.

Windows 8, which will be ready for consumer preview this month, and Office 15 are expected to be more in sync with users who seamlessly move between tablets, smartphones and PCs.

Companies and emerging markets are still hungry for PCs, but customers in mature markets are ditching their Windows-powered netbooks for Apple’s iPad, Amazon’s Kindle or postponing a PC purchase until the economy improves, according to the latest data.

Despite seeing the product launches boosting earnings, the brokerage maintained its “equal weight” rating on the stock on concerns about the impact of the rise in mobile and cloud computing on Microsoft’s business.

“The company does have answers to both themes but it remains to be seen whether these will be sufficient,” Barclays said.

“We prefer staying on the sidelines until we have further clarity.”

Shares of Redmond, Washington-based Microsoft closed at $30.77 on Thursday on the Nasdaq.

Reporting by Jochelle Mendonca in Bangalore; Editing by Joyjeet Das